Mr Fahour was paid $4.8 million last year as CEO and managing director of Australia Post.

AAP: Australia Post

Acting Prime Minister Warren Truss has backed the multi-million dollar salary paid to the head of Australia Post, as the Opposition says unions are right to question the pay of executives who slash jobs.

The union is highlighting the $550,000 salary paid in 2013 to the head of the US Postal Service, a company that has 19 times more staff and 11 times the revenue.

The highest paid public servant in Australia is the Secretary of the Department of Prime Minister and Cabinet, Ian Watt, who earns more than $800,000 per year.

But Mr Truss says Australia Post operates like a commercial company even though it is government-owned.

"It's a commercial company and they have to pay commercial wages to get the best people to get the job [done] for them," Mr Truss said in Gladstone.

Public sector pay comparisons

$844,800 Ian Watt, Prime Minister and Cabinet

$824,320 Martin Parkinson, Treasury

$798,720 Dennis Richardson, Defence

$798,720 Peter Varghese, Foreign Affairs and Trade

$757,760 David Tune, Finance

$716,800 Jane Halton, Health

$691,200 Gordon de Brouwer, Environment

$665,600 Simon Lewis, Veterans Affairs

$507,000 Tony Abbott, Prime Minister

Source: Remuneration Tribunal

"It's a decision for their board. Australia Post is facing real challenges and they will need quality management and an innovative board to solve the problems."

Mr Fahour has announced a major restructure of Australia Post, which involves splitting the company into a retail and standard mail division, and an arm devoted entirely to the booming parcel delivery service.

Joan Doyle from the Communications Workers Union says Mr Fahour is struggling in the top job.

"Given that he's still not really kicking goals we think that that salary's excessive," she said.

Mr Fahour says he does not determine his own pay.

"The matter of compensation is a matter for the board," he told Radio National.

Ms Doyle says the same board has restricted pay rises for ordinary postal workers but backed big bonuses for the bosses.

"The staff were very upset when he got a 66 per cent pay rise last year and they got a 1.5 per cent pay rise," she said.

"While the board might set Mr Fahour's salary, there's a bit of [a] symbiotic relationship between the board and Mr Fahour, where he looks after them and they look after him."

"There's no doubt that the internet's changing the way Australians communicate with each other but it's how you manage change [that] is terribly important to whether or not its viewed as the right thing or the wrong thing.

"Executives who are receiving multi-million dollar wages when hundreds of people are losing their jobs ... people probably do look at that and say 'what's going on here?'"